Canadian Provincial Premium Tax Marine Exemption

Wed 13 Dec 2017

All Canadian marine business will be treated as taxable unless the provincial premium tax exemption is explicitly claimed

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Lloyd’s Tax Department has recently concluded a provincial premium tax audit with the British Columbian tax authorities, during which it was brought to our attention that the marine exemption is not being accurately applied to Canadian marine policies.

In order to address the concerns of the tax authority, all Canadian marine business will be treated as taxable unless the underwriter clearly states that it is exempt marine business on the MRC or other documentation presented to Xchanging.

The Canadian marine tax exemption is very narrow and only limited to risks associated with navigation of the sea, e.g. ship’s hull & liability and marine cargo. Other risks written in the marine market are treated as accident, property or liability risks for Canadian regulatory and tax purposes.

For more information on Canadian provincial premium tax, please refer to Lloyd’s Market Bulletin Y5137 or consult the guidance on Crystal. Alternatively, please contact the Lloyd’s Tax Department.

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